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Optimal R&D subsidies in a model with physical capital, human capital and varieties

Listed author(s):
  • Gómez, Manuel A.
  • Sequeira, Tiago N.

In this paper, we analyze the social planner solution of an endogenous growth model with physical capital, human capital and R&D. The model incorporates three sources of inefficiency: monopolistic competition in the intermediate-goods sector, duplication externalities and spillovers in R&D. A complete stability analysis for the optimal growth problem of this model is provided. We characterize the optimal policy that can decentralize the optimal solution and find that the path of the optimal R&D subsidy can be non-monotonic.

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File URL: http://www.sciencedirect.com/science/article/pii/S0264999312002519
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Article provided by Elsevier in its journal Economic Modelling.

Volume (Year): 30 (2013)
Issue (Month): C ()
Pages: 217-224

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Handle: RePEc:eee:ecmode:v:30:y:2013:i:c:p:217-224
DOI: 10.1016/j.econmod.2012.07.019
Contact details of provider: Web page: http://www.elsevier.com/locate/inca/30411

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